Mobile Banking in Bangladesh

When we heard the term, ‘Mobile banking’ we assume something associated with the mobile phone or smartphone. Nearly all of the people these days have a mobile phone or smartphone. With the passage of time, the banking system became smarter with the invention of mobile banking. They have confined the bank over their house. They can bank whenever and wherever they want. By using the mobile phone or smartphone they can transfer money, pay bills, give the deposit. That’s why mobile banking is the fastest growing channel in banking history.

Mobile banking is a new technology in Bangladesh which started from 31st March 2011. This concept of Mobile Banking Services (MBS) was launched by Dutch Bangla Bank Limited in Bangladesh.
Earlier, the central bank approved mobile financial services such as inward foreign remittance, cash in/out using on m-wallets, private to private (P2P), business to private(B2P), government to private(G2P)  payments etc., and many more services. (Web source: Dutch Bangla Bank Ltd.)
Brac Bank Limited was the 2^nd bank to enter into this industry. Then all other banks open with the same idea.

List of some mobile banking service provider in Bangladesh

>> Rocket by Dutch Bangla Bank Ltd.
>> bkash  by Brac Bank Ltd.
>> mCash by  Islami Bank Bangladesh Ltd.
>> MyCash by Mercantile Bank  Ltd.
>> Ucash by United Commercial Bank Ltd. and many more.

The basic theme of mobile banking
– A client-server system
– Designed for mobile device
– To access  accounts, pay bills, authorized fund transfers or perform other activities
– Used through SMS, WAP or App service.
In a broad sense, mobile banking refers to a facility provided by banks that enables customers to execute bank transactions, via cellular devices. It is revolutionizing how people interact with their financial institutions. The earliest mobile banking services were offered over SMS, a service known as SMS banking. With the introduction of smartphones and WAP support enabling the use of mobile web in 1999, the first  European banks started to offer mobile banking on this platform to their customer.

bKash currently dominates the Mobile Banking  Services(MBS)  space accounting for more than half of the market. It becomes the market leader having agents in every corner of streets. Using the strong and wide Mobile network of five giant mobile operating company; Grameenphone,  Robi,  Banglalink,  Airtel, Teletalk.  It provides many daily services like cash in, cash out, payment, send money, buys air-time, remittance. On the other hand, Rocket is in the 2^nd position in capturing the market. It provides the ATM withdrawal services and the linkup between Dutch Bangla Bank Account and Mobile Account to transfer money.

In Bangladesh, mobile banking is more beneficial to rural people like farmers, village businessman. By signing up in mobile banking, the difficulties of the transaction of money have been dispelled. It is difficult to go to the bank for rural people as the nearest one is some miles away from their house. But mobile banking is close to their home. They can receive and send money quickly and easily with a mobile phone or by going to the nearest agent in the local market. The village people who left their school at early ages and unable to read and write, that doesn’t matter now. They can use a mobile phone for transferring money without the hassles to fill up form in writing. It makes their life easier.  The conventional bank doesn’t exist everywhere.

The Bill & Melinda  Gates Foundation, the world ’s largest philanthropic organization have become an investor of bKash in 2014.  Bill Gates thinks this Bangladeshi upstart  could revolutionize banking for the poor. Bill Gates said that “Banking is more fundamental than I realized. There have been attempts:  microfinance groups, Co-operatives but the transaction fees have always been too high. Until we get those services down the very low fees onto the cellphone in digital mode only then banking will always be for those who are better off.”

bKash is not just a money transferring tool. It’s a payroll system, a mobile wallet, and a savings account; all digital, all affordable, all regulated by the central bank.  In spite of being the 1^st participator in MBS, Rocket couldn’t capture the market as bKash because of its shortage of retail points. But nowadays there are many rising competitors in mobile banking.

In Bangladesh, the term  ‘Mobile Banking’ remind every people of bKash. Fortune magazine ranked bKash among the top 50 companies in the list of “Change the World” in 2017.  According to them, 70% of the population of Bangladesh lives in rural areas where access to formal banking services is difficult.

Contributor: Farjana Mahzabin; Studying at Mawlana Bhashani Science and Technology University.